More growth for co-working office space

The popularity of co-working office space is not just a fad. In fact, according to a new report, there’s room for continued growth in this part of the Auckland office market.

Thursday, March 5th 2020, 10:37AM

by The Landlord

Bayleys Research has just released new analysis into the sector and it shows there is now more than 48,000 square metres of committed office space dedicated to co-working environments.

That equates to approximately 2% of Auckland’s office space.

Bayleys Auckland commercial and industrial director Lloyd Budd says that while growth within the co-working office leasing sector in Auckland had been rapid, international trends suggest that further significant growth is likely.

“In many established markets globally, co-worker organisations lease between five and 10 percent of the total office stock.

"At the lower end of this scale, Auckland’s CBD could accommodate at least 70,000-square metres of space.”

The arrival of global co-working giant WeWork in Auckland is likely to further impetus to the sector. In February this year, WeWork committed to an 8,500-square metre premises at 131 Queen Street.

Budd says the Auckland WeWork property is part of a 224% increase on the 14,800sqm of co-working office space which was in the Auckland market in 2016.

But WeWork is not the only international heavyweights active in the Auckland market.

Fellow co-working operator Spaces – part of the IWG group of co-working brands including Regis and Biz Dojo - has committed to three floors in the Commercial Bay development and already has space at 155 Fanshawe Street and 501 Karangahape Road.

“These commitments will allow Spaces to add approximately 1,200 desks to the city’s coworking inventory,” Budd says.

In addition, the city’s largest co-working operator, Generator – owned by Precinct Properties - is plans to expand its footprint by leasing additional space in the Wynyard Quarter.

Budd says co-working leases has traditionally been the real estate domain of technology-based sole-trader and small business operators on flexible short month-to-month leases.

“But the practice had now evolved into the upper echelons of New Zealand’s corporate sector – with firms such as ANZ Bank, Amazon, Facebook embracing the floorspace-used model.”

The growing popularity of, and demand for, offers opportunities to private commercial property owners too. Many may have scope to transform their properties into co-working spaces and there are benefits that can come with that.

Read more:

Join the office space revolution

The truth about flexible workspaces

Tags: Bayleys commercial property demand investment landlords property investment tenants